Tennessee Betting

Tennessee holds the unique distinction of having more legal betting options on the internet than in the real world. The state is traditionally very anti-gambling with no land-based casinos, racetracks or places to play poker with other people. The fact that the state didn’t even establish a lottery until 2003 should provide some perspective as to how reluctant Tennessee is to embrace gambling in any form.

The funny thing is Tennessee actually has numerous online betting options for horse racing and fantasy sports. Most US-based horse racing and fantasy betting sites accept customers from Tennessee with no legal problems whatsoever. Tennessee is also considering legislation to authorize online sports betting. If that bill passes, Tennessee may become the first state in the Union to legalize mobile betting but not in-person betting.

The reason it works out this way is that Tennessee has not yet approved private or tribal casinos and no racetracks have yet been built anywhere in the state. Meanwhile, some forms of online betting have received exemptions from federal anti-gambling laws and do not need specific authorization from each state.

Online poker and casino sites probably won’t come to the state any time soon. State gaming laws prohibit both forms of betting across the board and nobody has expressed any serious interest in changing that. However, the state’s recent pivot to legalizing mobile sports betting is a sign attitudes are beginning to change.

Sports Betting in Tennessee

Tennessee seemed like a huge underdog to legalize sports betting not all that long ago. That began to change in late 2018 after a bill seeking to authorize in-person and mobile sports betting was introduced by bipartisan coalition of sponsors.

HB 0001 has been approved by the TN legislature and Governor Lee committed to letting the bill pass into law without his signature despite his opposition to gambling expansion. The law is scheduled to take effect on July 1st and will allow licensed betting sites to begin offering online wagering shortly thereafter.

Under the law, mobile sports betting is authorized in Tennessee and establishes a tax rate of 20%. The bill originally called for retail sportsbooks to be authorized at brick-and-mortar locations, but an amendment has since scratched that to leave TN sports betting an online-only prospect.

The law calls for experienced gaming operators to apply for online betting licenses and places no cap on the number of licenses that may be issued. This should foster a competitive environment with multiple betting sites competing with one another for customers. Under the law, people 21+ located in Tennessee are allowed to sign up online and place bets through licensed betting sites and mobile apps.

The introduction of this legislation came as a bit of a surprise given the state’s historic reticence regarding gambling expansion. The state does not even have casinos or online gambling yet is now the latest state to move on sports betting.

One of the first major names in online gaming to respond to the new law was DraftKings. According to local media, DraftKings says it intends to launch of Tennessee as quickly as regulators allow. Barring any surprises, Tennesseans will soon have access to one of the most popular and highly-regarded betting sites in the country.

Horse Racing in Tennessee

Parimutuel horse wagering is legal in Tennessee but there is nowhere to place bets in person because no tracks exist in the state. However, the state does allow advance deposit wagering (ADW) through licensed betting sites. Therefore, all major horse racing sites accept customers from the state.

If you have an interest in betting on horses, you’ll need to visit one of the above sites to get your fix. Each of these sites is based in the USA and covers races from upwards of 150 tracks around the world. All wagers placed with these sites are comingled with wagers taken in-person at each track and any winning bets that you have are paid at full track odds.

Fantasy Sports

Online fantasy sports are legal and regulated in Tennessee. In April of 2016, Governor Bill Haslam signed the “Fantasy Sports Act” into law. The act specifically legalized daily fantasy sports and implemented consumer protection regulations. Fantasy site operators are required to obtain a license from the Secretary of State.

Fantasy sites that apply for a license are required to underdo a criminal background check and business investigation to ensure suitability for licensing. Once licensed, fantasy site operators must adhere to a number of regulations.

$2500 per month Deposit Limit

Fantasy sites must restrict players to a maximum of $2500 per month in total deposits. However, deposit limits can be increased on a case-by-case basis.

Segregation of Funds

Players’ funds must be kept in a separate bank account and may not be comingled with the fantasy site’s operational funds. This ensures that even if a fantasy site goes belly-up, players will not lose their money.

Identity Verification

Fantasy sites must use reasonable means to verify the identity of every customer. Players must be at least 18 years old and may only hold one account at a time. If one person opens more than one account at one fantasy site, that site must close the additional accounts. Fantasy sites must also take reasonable measures to ensure that players are not using other players’ accounts.

Record Keeping

Fantasy sites must maintain records of all player accounts for five years. These records must include all account transactions and all winnings earned by Tennessee players. Sites must also keep track of all revenue derived from Tennessee customers.

Annual Audits

Fantasy sites must contract with a third party to perform an independent audit every year. The results of each audit must be submitted to the secretary of state each year.

Other Regulations

The Fantasy Sports Act includes a variety of other regulations related to truthful advertising, combating problem gambling, establishing self-exclusion programs, preventing employees from participating in paid contests and more. You can read the full text of the act here.

Office Pools in TN

Tennessee formally legalized casual sports pools with a piece of legislation passed in 2019. Under SB 1057, “low level sports entertainment pools” are legal as long as they meet the following requirements:

Are run by an individual rather than a business entity

Max entry no greater than $25

Total prize pool no greater than $1,000

Does not involve laying odds

Basically, SB 1057 legalized your standard March Madness or NFL office pool. Prior to the passage of this law, even low-level sports pools could be considered unlawful gambling.

Online Poker and Casinos

Let’s start with poker. Tennessee does not look kindly upon poker in any of its forms. This includes playing poker in the real world, home games with your friends and online poker. A 2005 message from the Attorney General outlines its opinion that the state’s definition of “gambling” applies to poker as well.

Section 39-17-501 of the Tennessee Code defines gambling with the following text:

Gambling is contrary to the public policy of this state and means risking anything of value for a profit whose return is to any degree contingent on chance, or any games of chance associated with casinos, including, but not limited to, slot machines, roulette wheels and the like

The phrase “to any degree contingent on chance” gives the definition of gambling wide leeway. Because poker does indeed include an element of chance, it is classified as gambling in Tennessee and is therefore illegal. Furthermore, the law provides no exception for social gambling among acquaintances.

Not long ago, 48 members of a local Veterans of Foreign Wars organization were arrested in a police raid on a poker game. The players were all slapped with misdemeanors and police confiscated nearly $10,000. A lack of surefire evidence prompted police to offer the players a deal: let the police keep the confiscated money and no charges will be filed.

It should be noted that this poker game was played among the players only. The house did not take a profit or charge anyone a fee to play. Even though charges were eventually dropped, this whole story goes to show that the authorities treat poker as a serious offense.

Online poker is treated the same as poker in real life. The state’s gaming laws make no distinction between playing poker on the internet or in real life; any poker game played for real money is illegal. Participation in any poker game anywhere in the state is illegal if real money is involved.

Everything mentioned so far applies to online gambling as well. You cannot play casino-style games with your friends, out in public or by yourself on the internet. Participation in gambling or poker anywhere in Tennessee is classified as a Class C misdemeanor and is punishable by up to 30 days in jail and a $50 fine.

Tennessee also has a statute titled “Gambling Promotion” that makes it a Class B misdemeanor to host an unlawful gambling game, entice others to gamble or to make a profit. The punishment for a Class B misdemeanor in the state is up to 6 months in jail and a $500 fine.

These punishments can also be applied to participation in online gambling but the state has no means to enforce this law. Lots of people from the state regularly visit offshore casinos and poker sites to play for real money and are never arrested. However, the state would definitely come after you if you attempt to start your own internet gambling site.

State Lottery

Tennessee came late to the lottery game. Lawmakers first started throwing around the idea in 2000 and then had a public referendum in 2002. Voters approved the referendum and then lawmakers passed new legislation to establish a lottery in 2003. The lottery finally opened for business in 2004 and sold nearly $11 million worth of tickets on the first day.

Since going live, the Tennessee lottery has raised more than $3 billion in funds for state education programs. Lottery tickets are not sold online in any way, shape or form in Tennessee. Neither the lottery itself nor third-party websites are authorized to sell tickets online. You must visit a retailer in person and pay with cash to purchase tickets.